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Aditya Consumer BSE SME IPO review (Avoid)

Review By Dilip Davda on Sep 28, 2016

Aditya Consumer Marketing Ltd (ACML) is an ISO 9001:2008 certified Company and operate and manage chain of supermarkets, salon & spa services, fine dining restaurants providing multi-cuisine foods and beverages, Take-away-express services, Banquet and Conference halls for corporate events and private parties such as birthday, marriage ceremony, anniversaries etc. at various locations of Patna in the state of Bihar, India. Company started its operation and opened its first Supermarket under the brand 9to9 in the year 2002 at Bandar Bagicha, Patna and thereafter it continued to expand its business and forayed into diversified business interests. ACML has entered into franchise agreement dated May 09, 2008 for operating restaurants under the brand name of Yo! China with Moods Hospitality Private Limited.

To part finance renovation of Supermarket, Restaurant, Spa and Salon, meet working capital requirements and general corpus funds, the company is coming out with a maiden IPO of 4000000 equity share of Rs. 10 each at a fixed price of Rs. 15 per share to mobilize Rs. 6.00 crore. Issue opens for subscription on 29.09.16 and will close on 05.10.16. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely managed by Guiness Corporate Advisors Pvt Ltd and Cameo Corporate Services Ltd is the registrar to the issue. Having issued equity at par from inception till 2007, it raised further equity at a price of Rs. 30 to 310 per share from 2008 to 2013 and then again raised equity at par and then issued bonus in the ratio of 16 for 7 in March 2016. Post issue its current paid up equity capital of Rs. 10.63 crore will stand enhanced to Rs. 14.63 crore.

On performance front, for last four fiscals, the company has reported turnover/net profits of Rs. 44.17 cr. / Rs. 0.53 cr. (FY13), Rs. 53.02 cr./ Rs. 0.68 cr. (FY14), Rs. 59.24 cr. / Rs. 0.72 cr. (FY15) and Rs. 62.81 cr. / Rs. 1.81 cr. (FY16). If we attribute the latest earnings on fully diluted equity post IPO then asking price is at a P/E of 12 plus and at a 1.5 P/BV. As claimed in the prospectus, it has no listed peers to compare with.

On merchant baker’s front, this is the 12th mandate in last 3 years from its stable. It has erratic track record with few of its past mandate being suspended from trading.

Conclusion: Issue appears to be fully priced, merchant banker has shaky track record. Hence only risk savvy cash surplus investors may consider long term investment.


Conclusion / Investment Strategy

Issue appears to be fully priced, merchant banker has shaky track record. Hence only risk savvy cash surplus investors may consider long term investment.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 28, 2016

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

Aditya Consumer Marketing IPO FAQs

  1. 1. Why Aditya Consumer Marketing IPO?

    The initial public offer (IPO) of Aditya Consumer Marketing Ltd offers an early investment opportunity in Aditya Consumer Marketing Ltd. A stock market investor can buy Aditya Consumer Marketing IPO shares by applying in IPO before Aditya Consumer Marketing Ltd shares get listed at the stock exchanges. An investor could invest in Aditya Consumer Marketing IPO for short term listing gain or a long term.

  2. 2. How is Aditya Consumer Marketing IPO?

    Read the Aditya Consumer Marketing IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Aditya Consumer Marketing IPO what should investors do?

    Aditya Consumer Marketing IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Aditya Consumer Marketing IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Aditya Consumer Marketing IPO good?

    Our recommendation for Aditya Consumer Marketing IPO is to avoid.

  5. 5. Is Aditya Consumer Marketing IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Aditya Consumer Marketing IPO.

  6. 6. When will Aditya Consumer Marketing IPO allotment status?

    The Aditya Consumer Marketing IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Aditya Consumer Marketing IPO allotment status to check.

  7. 7. When will Aditya Consumer Marketing IPO list?

    The Aditya Consumer Marketing IPO will list on Monday, October 17, 2016, at BSE SME.